Asked by
Nathan Banks
on Dec 16, 2024
Verified
The journal entry a company records for the issuance of bonds when the contract rate is greater than the market rate would be
A) debit Bonds Payable, credit Cash
B) debit Cash and Discount on Bonds Payable, credit Bonds Payable
C) debit Cash, credit Premium on Bonds Payable and Bonds Payable
D) debit Cash, credit Bonds Payable
Contract Rate
The agreed-upon interest rate in a lending agreement, bond, or other financial contracts.
Market Rate
The prevailing interest rate available in the market for securities of a similar risk and maturity, or the standard rate charged or paid for a specific service or commodity.
- Gain proficiency in generating ledger entries for bond issuance activities, interest payment transactions, and the systematic reduction of bond discounts or premiums.
Verified Answer
RB
Learning Objectives
- Gain proficiency in generating ledger entries for bond issuance activities, interest payment transactions, and the systematic reduction of bond discounts or premiums.
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